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Facor Alloys Ltd.

BSE: 532656 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE828G01013
BSE 00:00 | 14 Jan 9.59 0.09
(0.95%)
OPEN

9.03

HIGH

9.97

LOW

9.03

NSE 05:30 | 01 Jan Facor Alloys Ltd
OPEN 9.03
PREVIOUS CLOSE 9.50
VOLUME 1424849
52-Week high 11.03
52-Week low 1.86
P/E
Mkt Cap.(Rs cr) 187
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 9.03
CLOSE 9.50
VOLUME 1424849
52-Week high 11.03
52-Week low 1.86
P/E
Mkt Cap.(Rs cr) 187
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Facor Alloys Ltd. (FACORALLOYS) - Director Report

Company director report

TO THE MEMBERS

The Directors submit the 18th ANNUAL REPORT on the businessand operations of the Company together with the Standalone and Consolidated AuditedFinancial Statements for the year ended 31st March 2021.

FINANCIAL RESULTS

Rs. in Lakh

Particulars Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Gross Revenue from operations 14366.74 29139.31 14366.74 29139.31
Other Income 403.69 2842.20 403.91 3095.11
Total Revenue 14770.43 31981.51 14770.65 32234.42
Operating expenses 15248.97 29692.01 15285.66 29767.25
Profit before interest (478.54) 2289.50 (515.01) 2467.17
Depreciation Tax and
Amortization (EBIDTA)
Finance Costs 332.67 379.93 394.18 403.66
Depreciation and amortization expenses 200.33 239.02 200.33 256.57
Profit/(Loss) before exceptional item and tax (1011.54) 1670.55 (1109.52) 1806.94
Exceptional item 842.67 559.39 842.67 559.39
Profit/(Loss) before taxation (168.87) 2229.94 (266.85) 2366.33
Taxation (including (213.04) 1201.83 (213.04) 1201.83
Deferred Tax)
Profit/(Loss) after 44.17 1028.11 (53.81) 1164.50
Taxation (PAT)
Other Comprehensive (30.63) (104.05) (208.70) 1023.02
Income
Total Comprehensive 13.54 924.06 (262.51) 2187.52
Income for the period Comprising profit/(loss) & Other comprehensive Income for the period

OVERALL PERFORMANCE

During the year under consideration Company achieved the production of36140 M.T. as against 66500 M.T. in the previous year recording a surge/ downfall of45.65%.

The demand for ferro alloys principally is determined by developmentswithin the Stainless Steel industry. The global stainless steel market size was valued atUSD 93.69 billion in 2018 and is expected to witness a CAGR of 5.2% from 2019 to 2025.Rising demand from end-use industries such as automotive oil and gas and construction isanticipated to propel the growth. Stainless steel caters to demand from variousapplication segments such as building and construction heavy industries consumer goodsand others. Stable Stainless Steel industry scenario augurs well for the ferro alloysindustry.

The Asia Pacific is mainly driven by the increasing production ofstainless steel in China and India. Ferrochrome is widely used to manufacture stainlesssteel as it is resistant to corrosion and has an aesthetic appearance.

Exports (Deemed) are at Rs.71.40 crores as against Rs.145.32 crores inthe previous year and during the year under review foreign currency earnings in rupeeterms was NIL. The Company derived 49.74% of its total sales from deemed exports.

On account of above and other factors including lower salesrealization the Loss before tax was at Rs.10.12 crore as compared to Profit before tax ofRs.16.71 crore in the previous year. The COVID-19 pandemic has disrupted businessoperations partially due to lockdown and other emergency measures imposed by the Stategovernment. The management has continuously considered the possible effects that mayimpact the carrying amounts of property plant and equipment trade receivablesinventories investments loans and other assets. However the impact assessment ofCOVID-19 is a continuing process given the uncertainties associated with its nature andduration and accordingly the impact may be different in the future course of action. TheCompany will continue to monitor any material changes to future economic conditions andthe consequent impact on its business if any.

DIVIDEND

In view of the insignificant profit the Directors regret theirinability to recommend any dividend for the financial year ended 31st March2021 on Equity Shares of the company.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March 2021 is`19.55 crores. During the year under review the Company has not issued any furthershares. The Company has not issued shares with differential voting rights. It has neitherissued employee stock options nor sweat equity shares and does not have any scheme to fundits employees to purchase the shares of the Company. The equity shares of the Company arelisted on BSE Limited and the Company has duly paid the annual listing fees to the citedStock Exchange.

ANNUAL RETURN

The annual return of the company as on March 31 2021 in terms of theprovisions of Section 134(3)(a) of the Companies Act 2013 is available on thecompany's website www.facoralloys.in.

NUMBER OF MEETINGS OF THE BOARD

The Board met four times in FY 2020-21 viz. on 30th June2020 14th August 2020 11th November 2020 and 11thFebruary 2021. The maximum interval between any two meetings did not exceed 120 days or /except as permissible by law in this regard.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act 2013 and implementationrequirements of Indian Accounting Standards (‘IND-AS') under Companies Act 2013on accounting and disclosure requirements and as prescribed by SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Audited Consolidated FinancialStatements are provided in this Annual Report.

SUBSIDIARIES

Pursuant to Section 129 (3) of the Companies Act 2013 read with Rule 5of the Companies (Accounts) Rules 2014 the statement containing salient features of thefinancial statements of the Company's Subsidiaries and Associates' (in updatedForm AOC-1) is given in the Note no-37 of the consolidated financial statements. Thecompany will make available the Annual Accounts of the subsidiary companies and relateddetailed information to any member of the Company who may be interested in obtaining thesame. The annual accounts of the Company and that of the respective subsidiary companiesas well will also be kept open for inspection at the Registered Office of the Company.Further the Consolidated Financial Statements presented by the Company include thefinancial results of the subsidiary companies.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to provisions under Section 134 (5) of the Companies Act2013 your Directors hereby confirm:

(i) that in the preparation of the annual accounts for the financialyear ended 31st March 2021 the applicable accounting standards read withrequirements set out under schedule III of the Companies Act 2013 have been followed andthere are no material departures from the same;

(ii) that they have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit for the year under consideration;

(iii) that they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities;

(iv) that they have prepared the annual accounts of the Company for thefinancial year ended 31st March 2021 on a going concern basis;

(v) they have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively; and

(vi) that they had devised proper system to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

DECLARATION GIVEN BY INDEPENDENT DIRECTORS

The Independent Directors have given declaration that they meet thecriteria specified under Section 149 (6) of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations).

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Policy of the Company on Directors' appointment andremuneration (hereinafter referred to as "Nomination & Remuneration Policy")including criteria for determining qualifications positive attributes independence of aDirector and other matters provided under sub-section (3) of Section 178 is attached asAnnexure-1 to this Report.

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

Pursuant to provisions of Section 139 of the Companies Act 2013 readwith the Companies (Audit and Auditors) Rules 2014 M/s K K Mankeshwar & Co.Chartered Accountants (Firm Registration no.106009W) were appointed as Statutory Auditorsfor a term of 5 years to hold office from the conclusion of 14th AGM held on 20thSeptember 2017 upto the conclusion of the 19th AGM to be held in 2022.

The statutory auditor has confirmed their eligibility and submitted thecertificate in writing that they are not being disqualified to hold the office of thestatutory auditor.

The Auditors' Report to the Shareholders on the Standalone &Consolidated Audited Financial Results for the year under review has expressed unqualifiedopinion in the respective audit reports for the financial year 2020-2021. There were noqualifications observations or adverse comments on financial statements and matterswhich have any material bearing on the functioning of the Company.

Secretarial Auditors

The Company has appointed Mr. Tumul Maheshwari of M/S. MT & Co.New Delhi Company Secretaries to conduct secretarial audit and his Report onCompany's Secretarial Audit is appended to this Report as Annexure-2.

There are no qualifications reservations or adverse remarks ordisclaimers made in the Secretarial Audit Report.

COST AUDITOR

Maintenance of cost records and requirement of cost audit as prescribedunder the provisions of Section 148(1) of the Companies Act 2013 are applicable for thebusiness activities carried out by the Company during the period under review. Mr. PrakashUppalapati Cost Accountant has been appointed by the Board as Cost Auditor of the Companyto conduct audit of cost records of the Company for the year ended 31st March2021. Pursuant to the provisions of Section 148 of the Companies Act 2013 and the Rulesmade there under. Members are requested to consider the ratification of the remunerationpayable to Mr. Prakash Uppalapati.

There are no qualifications reservations or adverse remarks ordisclaimers made in the Cost Audit Report for the financial year 2020-2021.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has not provided any guarantee made a Loan and investmentpursuant to Section 186 of the Companies Act 2013 during the Financial Year.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

There are no contracts/arrangements/transactions which are not atarm's length basis and there are no material contracts/ arrangements/transactionswhich are at arm's length basis.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY AFTER CLOSE OF THE FINANCIAL YEAR

There are no material changes and commitments affecting the financialposition of the company which have occurred between the end of the financial year to whichthe financial statements relate and the date of the report.

CHANGE IN THE NATURE OF BUSINESS IF ANY

During the year there was no change in the nature of business of thecompany. Further there was no significant change in the nature of business carried on byits subsidiaries.

DISCLOSURE OF INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls with reference to the financialstatements as designed and implemented by the Company are adequate and commensurate withthe size and scale of its operation. The internal controls are tested for adequacyefficiency and effectiveness through audits by the internal auditors and the observationscorrective and preventive actions are reviewed by the management and Audit Committee ofthe Board of Directors. During the financial year under review no material or seriousobservation has been received from the Internal Auditors of the Company for inadequacy orineffectiveness of such controls.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL

There are no significant and/or material orders passed by theRegulator(s) or Court(s) or Tribunal(s) impacting the going concern status of the Companyand its business operations in future.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO

The information required under Section 134 of the Companies Act 2013read with Companies (Accounts) Rules 2014 are set out in Annexure-3 hereto forming partof this report.

RISK MANAGEMENT POLICY

The Company's Risk Management framework is designed to identifyassess and monitor various risks related to key business and strategic objectives and leadto the formulation of a mitigation plan. Major risks in particular are monitored regularlyat Executive meetings and the Board of Directors of the Company is kept abreast of suchissues.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has formed a Committee and adopted a policy on preventionprohibition and redressal of sexual harassment at workplace in line with the provisions ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 and the Rules there under.

The company has complied with provisions relating to the constitutionof Internal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. No complaints has been received by thecommittee during the year under review.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company at the BoardMeeting held on 29th May 2014 approved a Policy on CSR and the Policy washosted on the website of the Company.

During the year under review the Company has made CSR spending of 2%of the average net profit for last three financial years as per the applicable provisions.

In view of the same the Company has made the requisite CSR spending onthe specified activities during the financial year ended 31.03.2021 the details of whichis provided in Annexure-4.

ANNUAL BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and Regulationsof SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 IndependentDirectors at their meeting without the participation of the Non-independent Directors andManagement considered/evaluated the Boards' performance Performance of the Chairmanand other Non-independent Directors.

The Board subsequently evaluated its own performance the working ofits Committees (Audit Nomination and Remuneration and Stakeholders RelationshipCommittee) and Independent Directors (without participation of the relevant Director). Inthe opinion of the Board the independent directors possessing the necessary skills likeintegrity expertise and experience (including the proficiency) etc. for being appointedon the Board of the Company.

TRANSFER OF UNCLAIMED EQUITY SHARES TO INVESTOR EDUCATION ANDPROTECTION FUND (IEPF) SUSPENSE ACCOUNT

During the year under review there is no outstanding amount ofdividend which remained unpaid or unclaimed for a period of seven years and equity shareswhose dividend were unclaimed/ unpaid for seven consecutive years required to betransferred to the Investor Education and Protection Fund (IEPF) pursuant to Section 125of the Companies Act 2013 read with the Investor Education and Protection Fund (Awarenessand Protection of Investors) Rules 2001 and the Investor Education and Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016.

The details of shares/shareholders in respect of which dividend has notbeen claimed and transferred to the IEPF as required are provided on our websitewww.facoralloys.in and on the website of the Ministry of Corporate Affairs.

Any person whose unclaimed or unpaid amount has been transferred bythe Company to IEPF may claim his/her refunds from the IEPF authority. The detailedprocedure for claiming shares and/or Dividend Amount is available on the website of IEPF(www.iepf.gov.in).

The Nodal Officer for the purpose of IEPF is Company Secretary and thewebsite address is www.facoralloys.in.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to Section 177 (9) of the Companies Act 2013 read with Rule 7of the Companies (Meetings of Board and its Powers) Rules 2014 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors hadapproved the Policy on Vigil Mechanism/Whistle Blower and the same was hosted on thewebsite of the Company. This Policy inter-alia provides a direct access to the Chairman ofthe Audit Committee.

Your Company hereby affirms that no Director/ employee has been deniedaccess to the Chairman of the Audit Committee and that no complaints were received duringthe year.

PUBLIC DEPOSITS

During the year under review the Company has not invited any depositfrom public.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197 (12) of the Companies Act2013 read with Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 during the year under review there were no employeesreceiving remuneration in excess of ` 10200000/- per annum or ` 850000/- per monthrequiring disclosure.

Disclosures pertaining to remuneration and other details as requiredunder Section 197 (12) of the Companies Act 2013 read with Rule 5 (1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided in theAnnexure forming part of the Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on date Company has 8 Directors with an Executive Chairman. Out ofthe 8 Directors 3 are Executive Directors and 5 are Non-Executive Directors. Out of the 5Non-Executive Directors 4 are Independent Directors including one Woman IndependentDirector and 1 is Non-Executive & Non Independent Director. The Composition of theBoard is in conformity with the provisions of the Companies Act 2013 and relevantRegulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.Mr. Ashim Saraf Director retires by rotation at the forthcoming Annual General Meetingand being eligible offers himself for reappointment.

The Board in its meeting held on 12th April 2021 acceptedthe resignation of Mr. O. P. Saraswat (Dy. CFO) and places on record its appreciation forhis contributions to the Company and Mr. Vijay Vashisth has been appointed as the Dy. CFOto hold office with effect from 16th April 2021.

Currently Mr. R. K. Saraf (Managing Director) Mr. Ashim Saraf &Mr. Anurag Saraf (Joint Managing Directors) Mr. Vijay Vashisth (Dy. CFO) and Mr. PiyushAgarwal (Company Secretary & Compliance Officer) are the key managerial personnel ofthe Company. None of the Whole-time Key Managerial Personnel (KMP) of the Company isholding office in any other Company as a Key Managerial Personnel.

Further none of the Directors / KMP of the Company is disqualifiedunder any of the provisions of the Companies Act 2013 and relevant Regulations of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

The Company has formulated a code of conduct for all members of theBoard and Senior Management Personnel. All concerned members/executives have affirmedcompliance with the said code.

REPORTING OF FRAUDS BY AUDITORS OF THE COMPANY

During the year under review none of the Auditors of the company hasreported to the audit committee under Section 143 (12) of the Companies Act 2013 anyinstances of fraud committed against the Company by its officers or employees the detailsof which would need to be mentioned in the Board's report.

CORPORATE GOVERNANCE

Management Discussion and Analysis Corporate Governance Report andCertificate from Practicing Company Secretary regarding compliance of conditions ofCorporate Governance are made a part of the Annual Report.

COMMITTEES OF THE BOARD

The Audit Committee formed by the Board of Directors of the Companyconsists of Mr. K. Jayabharat Reddy Mr. K.L. Mehrotra & Mr. A.S. Kapre who areNon-Executive Independent Directors and Mr. R.K. Saraf Managing Director of the Company.Mr. K. Jayabharat Reddy is the Chairman of the Committee. The Committee's role termsof reference and the authority and powers are in conformity with the requirement of theCompanies Act 2013 and the Listing Regulations.

Details on the composition of other committees of the Board areprovided in the corporate governance report and majority of the committees consistsentirely of independent directors. During the year all recommendations made by thecommittees were approved by the Board.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with theapplicable Secretarial Standards issued by the Institute of Company Secretaries of India(SS-1 and SS-2) respectively relating to Meetings of the Board and its Committeesincluding general meetings of the company which are mandatory in nature.

INDUSTRIAL RELATIONS

During the year under review the overall industrial relations in theCompany remained cordial.

ACKNOWLEDGEMENT AND APPRECIATION

Your directors place on record their sincere appreciation for thesignificant contribution made by its employees through their dedication hard work andcommitment and also for the trust reposed in the company by all other stakeholders. Theboard of directors also acknowledge the support extended by the analysts bankersgovernment agencies media customers business partners members and investors at large.The Company sincerely thanks the Central & State Governments for their continuedsupport and warm co-operation extended towards the business as well as the Company'ssocial functions. It looks forward to your continued support in the company'sendeavour to accelerate access to innovative and affordable business.

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